Skechers continued to grow solidly in the second quarter of the year. The sneaker manufacturer saw both its revenue and net profit rise, thanks to remarkably strong performance in Europe.
Europe drives growth
In the period from April to June, Skechers posted a sales growth of 13.1 % to 2.44 billion dollars (2.1 billion euros). Adjusted for exchange rate fluctuations, the increase was 11.5 %. The wholesale channel achieved a 15 % growth to 1.30 billion dollars, while Skechers’ own retail revenue rose 11 % to 1.14 billion dollars.
In its home market, sales dropped 0.2 % to 862.1 million dollars (740 million euros). International operations more than made up for that, with sales growing 22 % to 1.58 billion dollars (1.3 billion euros). The region EMEA (Europe, the Middle East and Africa) stood out, with an increase of 48.5 % to 731.5 million dollars (630 million euros). In China, on the other hand, revenue fell 8.2 % to 287.2 million dollars (250 million euros).
Higher costs depress margins
Although operating profit fell 16.2 % to 173.1 million dollars due to higher costs and a lower gross margin, net profit rose 21.5% to 170.5 million dollars (145 million euros). For the first six months of the year, sales rose 10 % to 4.85 billion dollars, while net profit rose 7.5 % to 372.9 million dollars.
Skechers is the third biggest sneaker brand in the world, following only Nike and Adidas. Soon the familiar name will disappear from the stock market after 23 years, following the acquisition by investment fund 3G Capital, which is also a shareholder of AB InBev, Restaurant Brands International (the group behind Burger King) and Kraft Heinz. As Skechers imports most of its sneakers from countries such as Vietnam and China, it has been hit hard by higher import tariffs imposed by the United States.
